The Red Sea city of Aqaba has missed out on the building boom that has transformed neighbouring resorts in Egypt and Israel in recent years. This is now due to change with an estimated $350 million resort project coming up on Aqaba's northern beach area.

The project is the brainchild of the local Business Tourism Company (BTC). It is based around a Red Sea lagoon that will be dredged in an area currently owned by the government. Set around the lagoon will be a complex of up to 10 four and five-star hotels, a 40,000-square-metre island with themed areas, pools, food outlets and entertainment facilities, a conference centre and indoor water park. Adjoining land will be used for an 18-hole golf course, a polo field, riding centre and year-round equestrian facilities. The lagoon will be wide enough to allow water sports and the aim is to attract a major international event to the new development.

BTC plans to establish a JD 100 million ($141 million) public shareholding company, the Business Tourism Investment Company (BTIC) to carry out the project. BTIC will act as manager and operator of the site while individual investors will be responsible for hotel construction.

The scheme is far more ambitious than anything previously conceived for Aqaba. Several other hotel projects are already underway further down the coast but the BTC project could help to transform the economy of the southern city.

The project envisages some relocation of existing hotels in the area. The Social Security Corporation (SSC) has already agreed to demolish its Aqaba Beach Hotel and build an Intercontinental hotel within the new complex. The Coral Beach and Radisson hotels, which have beach front properties, could also become involved in the scheme. Whether they participate or not BTC has already acquired land needed for the lagoon inlets and will have a 60,000-square-metre stretch of vacant beach for the complex.

The balance of the land earmarked for the project, 500 dunums in all, is state-owned and will be given as equity. The company already has commitments from Arab International Hotels (AIH), owners of the Amman and Dead Sea Marriott hotels, for a Marriott and the SSC for the Intercontinental. Al-Zahid Industrial & Investment Company of Saudi Arabia is committed to a condominium style project. Hotel investors will have the choice of buying their sites of 22,000-30,000 square metres or allocating the BTIC equity in their projects.

BTC managing director Bassam Maayah says the construction timetable will be tight as the company wants to see the project up and running within five years. He says the company is now finalising the terms of land purchase from the Aqaba Region Authority and once this is done, hopefully by the end of March, the London office of Hellmuth, Obata & Kassabaum (HOK), who have done the master plan for the scheme, will get the go-ahead to prepare detailed infrastructure designs. HOK's terms of reference call for guidelines for a framework to ensure quality and coherence in the design of hotels and the study will also determine the overall character of the complex.

Maayah says lagoon excavations can begin four months after the start of the design work so that it can be ready by the end of 1999. The full masterplan will take about nine months and identify all the plots to be developed as hotels so that the hotel developers can start their own design work. Hotel construction should begin in 2001-2002 with the first hotels opening before the end of 2002.

The design for the lagoon is complex although construction should be straightforward and a technical feasibility study has already been completed by two UK companies, Pell Frischmann Group and HR Wallingford. Maayah says the major technical requirement for the lagoon is good aeration and HOK has been instructed to ensure that the water is renewed every 48 hours. Pumping equipment under the entertainment island will move the water, creating the waves and waterfalls that will be a feature of the lagoon. Each of the inlets will have a gate that can be opened to take advantage of tidal movements.

Environmental impact studies have already been done to ensure there will be no adverse effects on Aqaba's main attractions, its coral and tropical fish. HOK has been asked to conduct a further study and the development company intends to sponsor a continual assessment programme by one of Jordan's universities. The seafront adjoining the site does not have coral as it is fed by fresh water flows from the mountains to the north of Aqaba.BTC intends to appoint a construction manager to oversee all aspects of the project - the town centre, entertainment island, conference centre, golf course, polo field and equestrian facilities.

'We are already talking to international construction management companies as we want the construction manager on-board as the detailed studies are being done,' says Maayah. 'Our inclination at this stage is to divide the work into fewer packages as this will be easier and cheaper,' he says.

Infrastructure and water supplies will be crucial to the success of the development. It is estimated the complex will need 5 million cubic metres (mcm) a year, excluding the golf course and other open areas. It can use water from the Disi aquifer to the north of the city which already supplies Aqaba, and will re-cycle around 70 per cent of this for the golf course, leaving an estimated 1-1.5 mcm which could be given to Aqaba municipality for use in public areas. Maayah says extra water could also be generated quite cheaply from 500-cm-a-day desalination plants which could pump water from the lagoon and aid circulation.

Maayah wants to see the first hotels in the complex open by 2002 and the last opening by the end of 2003. He says construction can be organised so that new hotel building does not disturb existing facilities.

The full project will push the number of hotel beds in the area to 4,200 and should be the basis for a major growth in tourist activity. But BTC is taking a cautious approach on financing its estimated $120 million share of the costs. 'Tourism is fickle,' says Maayah. BTC plans to provide $100 million from the capital of BTIC and raise just $20 million in loans.

The company is not expecting any difficulty raising the money. Founding shareholders include Prince Alwaleed Bin Talal Bin Abdulaziz of Saudi Arabia, Al-Zahid Industrial & Investment Company, the Business Tourism Company, Arab International Hotels and a number of local banks. The private sector arm of the World Bank, the International Finance Company, has also shown some interest in the project.